How to Design an Effective Conglomerate Loyalty Program

Consumers today are a devoted bunch of surfers alternating between devices, websites, and channels in their shopping journeys. But the existing loyalty programs offered by brands pale in comparison as it is heavily reliant on redemption strategies of the past. Brands thus need a fluid partnership with other brands to work towards designing effective loyalty programs. To define a few terminologies associated with conglomerate loyalty, multi-brand loyalty is also known as conglomerate loyalty. Another shade of multi-brand loyalty is coalition loyalty where non-competing brands work together to encourage cross-brand loyalty experiences.

A recent report by The Wise Marketer clearly emphasizes that better fortunes are forecasted for multi-brand loyalty in the ensuing years. When organizations collaborate to deliver a better loyalty experience, customer delight is enhanced since consumers are offered a wider array of brands to interact with. Corporations across the world are now looking forward to synergizing and delivering this experience to customers. With the availability of technologies like data science and artificial intelligence, the ground is set for organizations to deliver effective conglomerate loyalty program stratgies. In this blog, we will discuss how brands can design an effective multi-brand loyalty program by analyzing key industry trends and cherry-picking the best practices. We would also cover a very crucial part which is – if your organization would stand a better chance to perform through a multi-brand loyalty or a standalone loyalty program.

Trending multi-brand loyalty models marketers must know

With the availability of technology, pooling information has become easier and designing large systems has become simpler. Multi-brand loyalty is thus a sophisticated pact between brands that has to be efficiently handled to prevent deal breakers. There have been instances of making and breaking of renowned multi-brand loyalty programs across the globe. It is the incidents of organizations coming together to forge loyalty programs and eventually breaking up, providing an insight into what went wrong and forming pillars for design. Let’s take a look at the three models that multi-brand loyalty programs generally adopt for facilitating their loyalty campaigns.

• Third-party marketing company owns the technology and drives the campaign. The third-party company forms the program owner and the participating brands are the tenants. In recent times, this model is losing its prominence due to inherent drawbacks like the presence of a middle-man in the system.
• A single large brand forms the program owner and other participating brands form the tenants. This model is currently in vogue and is recommended due to the absence of a middle-man to manage the multi-brand loyalty program.
• The upcoming model is built around a decentralized SaaS technology platform. This model attempts to minimize manual intervention with the participating brands owning and managing a decentralized technology platform (which functions as the program owner). The decentralized model facilitated by SaaS has not been deployed widely and is still in the research phase.

8 steps to design a dynamic multi-brand loyalty program 

1. Get your objective right

The intent of coming together of brands towards a common loyalty program must be clearly defined. There need to be some common interests of enterprises that are willing to be a part of the same conglomerate. Brands that have a higher market value must bear lower program costs since marquee companies tend to attract more customers. The former example is just an eye-opener while defining the objective of the conglomerate which highlights the level of brainstorming required at this step.

2. Choose the ideal loyalty engine

Loyalty engines must be thoughtfully evaluated to ensure that they are well suited for a multi-brand loyalty program. The loyalty engine must be scalable and seamlessly allow adding or dropping of tenants. The tenants also require hardware integrations that permit basic features like enrolling new customers or identifying existing customers.

3. Introduce hierarchy between program owner and tenants

A clear approval chain must be established for all critical processes within the multi-brand loyalty ecosystem. The program owner could be entrusted with the highest authority. 

4. Identify conglomerate’s niche

Brands as part of the conglomerate must ideally be from varied verticals. Companies under the umbrella of multi-brand loyalty may share common interests but not the same offerings. Evidently, the varied verticals are to foster synergy and not cannibalization. Brands must create a win-win for each other and not thrive on each other’s failure. However, a different strategy must be adopted in the case of similar verticals.

5. Start small to build steadily

You can set up a pilot multi-brand loyalty program and take it to complete production when it runs seamlessly during the pilot stage. Brands must not ruthlessly add brands to the conglomerate unless there is a defined strategy.

6. Leverage from comprehensive data collection 

Customer data is an asset for multi-brand loyalty programs because here consumers drive the campaign. When customer data is pooled and leveraged from varied brands, the consumers can be treated with customized experiences and marketers can fetch varied purchasing patterns.

7. Ensure seamless management of large databases 

In a multi-brand loyalty program, there would be several instances where some brands would want to run individual loyalty campaigns. Such brands would need to upload and maintain several documents. The process of uploading and managing large databases must be seamless.

8. Keep the cross-brand journey intuitive and enjoyable 

The flow of points awarded to customers must be intuitive, for instance, awarding loyalty points that can be redeemed for mobile accessories soon after shopping a mobile device. Incentivization that has a purpose and is relatively dynamic builds better emotional connection with the customers when compared to regular offers.

Leading conglomerates empowered by Capillary

Capillary’s impeccable expertise in multi-brand loyalty enables conglomerates to step up their business by deploying robust loyalty strategies in today’s data-driven world. Campaigns driven by our experts upscale customer enrolment and engagement. Let’s look at some of the notable conglomerate loyalty initiatives empowered by Loyalty+ and their key highlights:

• Al-Futtaim Group’s Blue Rewards program

Al-Futtaim Group is a UAE based conglomerate, operating several companies in sectors like automotive, retail, real estate and finance. The group’s Blue Rewards loyalty program, an app based program, allows members to view details of the overall points earned, cashbacks, personalized offers, or brand promotions. The  BLUE Loyalty app powered by Capillary Loyalty Platform has recorded several thousand downloads in a short time and exhibited a significant improvement in their redemption rates.

• VIG’s Tap Tap program

Vietnam Investments Group (VIG) is a private equity firm that focuses on high-growth businesses in Vietnam like manufacturing, transportation, tourism, education, retail, technology, and financial services. The Group’s Tap Tap loyalty app enables all its members to earn and redeem points from other brands in the same group. The mobile-based conglomerate loyalty program has unified over 600 stores and e-commerce sites to offer a fully omnichannel loyalty experience for its customers. For instance, Tap Tap has connected over 32 F&B and entertainment brands.

Multi-brand loyalty programs growing larger in future 

If you are looking forward to building a multi-brand loyalty program, note that the steps explained above are subjective and multi-brand loyalty often needs to be designed depending on the brand objective, strategy and goals. To quote a few recent instances of successful multi-brand loyalty programs, such cooperative loyalty programs have thrived in the airline industry. Multi-brand loyalty programs such as Star Alliance, SkyTeam and Oneworld offer its customers a facility to coordinate their loyalty points with other airlines. The marketing outreach that is leveraged through multi-brand loyalty programs is clearly reflected in such alliances.

The future is definitely prosperous for multi-brand loyalty programs. In the past, few renowned multi-brand loyalty programs might have failed for unique reasons like geographic separation of the brands as part of the program. Customers had to commute to diverse locations to redeem their points. Brands have now realized the need to be cooperative and the idea to stay united under an umbrella brand has evolved. Many different brands welcome the idea to share physical spaces and leverage multi-brand loyalty. It won’t be surprising that in a matter of time, multi-brand loyalty will be all set to revolutionize retailing. Capillary’s tie-up with Sonak’s group to power the latter’s digital loyalty program makes for an interesting read. Sonak Group is a Philippine retail group endeavoring to boost its sales across brands with Capillary’s support. Looking forward to leveraging the full potential of multi-brand loyalty for your brand? Connect with our expert team today to find out more.

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Sunil Dhananjaya shares expert insights on customer engagement, retail strategies, and more. Explore his articles on Capillary Technologies' blog for valuable industry knowledge.